U.K.-based asset manager Abrdn is set to implement substantial job cuts as part of a cost-cutting initiative aiming to reduce around GBP 150 million (USD 190 mn). According to a person familiar with the situation, the planned reductions, equivalent to about 10% of Abrdn’s 5,000-strong workforce, are anticipated to be disclosed in an upcoming trading update. These cuts will predominantly impact support functions rather than the investment side, following the appointment of advisory services from Boston Consulting Group late last year.
Abrdn, under the leadership of CEO Stephen Bird since 2020, is striving to trim expenses to restore profitability and enhance its share price. Previous measures include the closure, restructuring, or merging of over 100 investment funds, along with a significant reduction in the multi-asset team.
The impending job cuts come when relations between management and employees are strained. In December, it was revealed that Abrdn was reducing redundancy payouts by half and shortening paid parental leave by approximately a third, leading to employee dissatisfaction. Some employees are contemplating legal action, asserting potential breaches of employment law based on concerns about the process and communication of these changes.
One of the people added, “Abrdn’s trust with employees has gone.”
According to Abrdn, the company maintains an employee proposition that aligns well with industry standards and the company’s objective to achieve a more efficient operating model. The company insists that it actively engaged with employees during the process, making adjustments based on their feedback. Despite employee discontent, Abrdn argues that these measures are necessary for modernizing the firm and fostering the right culture.
Abrdn shares experienced a more than 3% decline on Tuesday in response to the news. The company, formed through the merger of Standard Life and Aberdeen Asset Management in 2017, has faced challenges over the past 18 months, including client outflows, losses, and fluctuations in its FTSE 100 index status. The asset manager reported larger-than-expected outflows in the first half of 2023, contributing to a pre-tax loss of GBP 169 million (USD 214 mn) for the six months to June 2023 and a GBP 615 million (USD 780mn) loss for the previous financial year.
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